The Wuhan Coronavirus has rapidly become a global health crisis and is producing hourly headlines. As a result, many of the vaccine tickers started to experience parabolic reactions as investors speculate on who will benefit from the growing health crisis. NanoViricides (NNVC) is one of these tickers and has rocketed from ~$3 to around $19 per share. On January 30th, NanoViricides announced it is has already initiated a program for developing a treatment for the 2019-nCOV." In addition, the company believes that their platform technology allows them to possibly have the most rapid pathway for new drug development against viral diseases. This triggered a sharp spike in the share price and has investors keeping a close eye on NNVC for their next move. Unfortunately, the company has yet to gain support from governmental and international agencies, so it doesnt appear NanoViricides is going to be in lead considering Moderna (MRNA) at least has a clinical collaboration with NIH. What is more, the company has started several pipeline programs but has yet to put one into human trials. Consequently, I believe investors need to be cautious around this ticker and should be skeptical about its ability to be a long-term investment.

I intend to provide a brief background on the companys platform technology and pipeline programs. In addition, I discuss my concerns around the companys technology and the ability to get one of their programs through the FDA. Moreover, I recap the companys history of publicizing their intention to develop a therapy for the latest outbreak but has yet to get one of these programs into the clinic.

NanoViricides is committed to the advancement of nanomedicine drugs in the battle against viruses. The companys nanoviricide platform technology intends to develop first-in-class drugs to envelope virus particles, which should block a virus from infecting a healthy cell and will eventually destroy the virus.

Figure 1: NanoViricide Mechanism of Action (Source: NNVC)

NanoViricides has its own c-GMP capable manufacturing facility that can be used to produce their own product candidates for both clinical and commercial use. In terms of pipeline programs, the company has multiple preclinical programs that are moving closer to an IND and into human trials (Figure 2).

Figure 2: NanoViricide Pipeline (Source: NNVC)

At the moment, the company is focused on bringing their NV-HHV-101 HerpeCide program into human trials. This would be the companys lead product candidate for a topical treatment for shingles rash and would be the companys first clinical program. According to the company, NV-HHV-101 had positive GLP Safety/Toxicology and non-GLP studies. Unfortunately, the company hasnt been able to produce any animal models in order to evaluate their dermal treatment but has been using ex vivo human skin organ culture model studies to determine some safety and efficacy. NanoViricides is preparing to file an IND and transition into a clinical-stage biotech.

Once NV-HHV-101 is in the clinic, the company expects to advance their HSV-1 cold sores and of HSV-2 genital ulcers programs. In addition, the company has several preclinical programs that include therapies for HIV, Dengue, Ebola, Bird Flu. These programs are at different stages of preclinical development and have demonstrated safety in animal models. According to the company, their anti-HIV drug candidate has demonstrated complete suppression of the HIV virus in mouse models, which would lead to a functional cure.

My Concerns

Does the NanoViricide entice or attack a virus? After reading through the companys presentation, I couldnt come to a conclusion about how their platform works. The company has illustrated that their NanoViricides attacks and envelopes the virus (Figure 1). However, they have also stated that the NanoViricides fools the virus that it is a host cell and then entraps the virus. Perhaps the NanoViricides work both ways, but it still has me wondering about how it is supposed to act inside the bodya human host cell is astronomically bigger than the virus that is attempting to infect it (Figure 3).

Figure 3: Size Comparisons (Source: Research Gate)

Viruses are measured in nanometers and human cells are measured in microns, yet, the NanoViricide is attempting to trick the virus to thinking it is human cell. Indeed, a virus doesnt decide to attach to a human cell because of its size but rather surface receptors. Still, I dont see it as it being tricked but rather just getting stuck and consumed...which makes me wonder about the size of a NanoViricide...How big of a virus can it cover? Can multiple NanoViricides work on one virus?

How does the NanoViricide destroy the virus? Viruses are quite resilient for just being RNA or DNA encapsulated in a protein coat. A virus requires host cells to carry out the remaining life processes in order to reproduce. This gives our bodies a chance to identify and destroy viruses with our innate and adaptive immune systems by several complex mechanisms. So, an explanation of how a NanoViricide destroys a virus needs to go beyond it encapsulates and destroys. The company explains that the NanoViricide delivers a devastating payload of active pharmaceutical ingredients API into the virus particle, thereby completely destroying the enemy. What is this API? Does it cause cytotoxicity? Is it relying opsonization? The company has a slide (Figure 4), that shows NanoVircide dismantling the capsid.

Figure 4: NanoViricide Dismantling (Source: NNVC)

Admittedly, the company is attempting to be one of the leaders in nanomedicine, so perhaps the mechanisms are beyond me and contemporary medicine. Unfortunately, we cant rely on currently approved products or science to understand how NanoViricide works, which doesnt bode well in my opinion. Contemporary vaccines, antibodies, and anti-viral drugs are effective against viruses, so I have to imagine health agencies and organizations are going to side with the standard-of-care modalities rather than take a chance with unproven technology.

Another issue I have with their technology is how they plan to run clinical trials for some of their pipeline programs. Take their shingles cream candidate, which is intended to be a topical treatment for the shingles rash. How is the company supposed to run a clinical trial for this? What would be an inclusion or exclusion trial for this? How would they know if it is better at clearing up a rash vs. placebo alone? A shingles rash appears abruptly and can last several weeks, so, determining if NanoViricides were able to shorten or diminish the impact of the rash would be difficult to measure. I have the same issue with infectious viruses, where the company is attempting to prove their NanoViricides work against a dangerous virus. With vaccines, companies are able to determine their ability to stimulate the immune system and elicit some seroprotection without the subject being infected with the virus. NanoViricides is not a vaccine, so the subject would have to be infected with the Wuhan Coronavirus in order to determine if it is effective against the virus. Overall, I see the company having a hard time clearing some of these regulatory hurdles and being able to prove its product works the way it is intended.

The other concerning issue is the companys history of developing the current global health crisis and has yet to get that program into the clinic. The company started to develop an Avian Bird Flu drug back in 2006, and yet, it has yet to hit the clinic. The same can be said for their Dengue program that was started in 2007, and the same with Ebola in 2008 and 2014. In addition, the company promoted their efforts against MERS in 2014 and has been attempting an HIV program for several years. Unfortunately, none of these programs have made it into the clinic for human trials but investors cash has made it into the companys bank account. It appears the company takes advantage of any major global health crisis by claiming they have a potential product and they are working hard to quickly progress their NanoViricides against the most recent headline virus. In reality, the company doesnt move out of discovery and preclinical studies. Sadly, investors have been enticed by the prospects of investing in a company that has an answer to the current scare, only to experience dilution that has devastated the share price over the years (Figure 5).

Figure 5: NNVC Weekly Chart (Source: Trendspider)

Even if the company wanted to push forward with development and start human trials, it will need a large amount of cash to get the ball rolling. What is more, the company would most likely need to secure commercial partners to produce and distribute their products. Admittedly, the company just raised about $7.5M in a public offering after the stock popped once the Wuhan virus started to catch the publics eye. Still, the company will most likely need some additional funding to get one of their product candidates through the FDA.

NanoViricide might be working on a potential treatment for the Wuhan Coronavirus, but investors need to be cautious here. The company has a 15-year history of promoting their attempts to develop a leading therapy for the latest virus but has yet to get one of these programs into human trials. Even if the company is able to develop a potential candidate, it is going to need the help from government agencies and institutions to be used and it looks as if some of the worlds biggest pharmaceutical and biotechs are already starting to send some of their anti-viral products to China to help with the outbreak. In fact, Johnson & Johnson (JNJ) is already working on a vaccine and has donated some of their HIV medications. What is more, NanoViricides is not even listed on a CNBC list of companies working on a Coronavirus vaccine or drug (Figure 6).

Figure 6: List of Coronavirus Companies (Source: CNBC)

Considering these points, I would advise investors to wary of investing until the company is able to get an IND and reports their first human data. Until then, I expect shorts to start piling on once the market realizes the company is reusing its old playbook of promoting a program and never following through with it.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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